A poor Christmas could spark disaster for retailers, with many fearing a repeat of last year’s wave of store closures after a poor festive period.

Last year’s slump came despite a record-breaking £830million Christmas sales week when prices were slashed by up to 80 per cent.

Household incomes are still being squeezed, and many will have an eye on saving ahead of Christmas rather than buying big-ticket and discretionary items

Director of the Scottish Retail Consortium Fiona Moriarty

Experts say that after a disastrous year, many retailers will now be trying to grab “a share of the Christmas wallet” to try to make up their losses.

But High Street stores may suffer again from consumers opting to do their Christmas shopping online, a trend that saw almost £40billion spent online across the UK last Christmas.

Several leading chains have already kicked off a price war in a bid to lure in recession-hit shoppers forced to slash their festive gift budgets this year.

Supermarket Asda is running a two- for-£20 promotion on selected toys, while Sainsbury’s has reduced selected toys and bikes to half price.

Fiona Moriarty, director of the Scottish Retail Consortium, said: “Household incomes are still being squeezed, and many will have an eye on saving ahead of Christmas rather than buying big-ticket and discretionary items.

“With consumer confidence at a six-month low, hopes of sales picking up in the run-up to Christmas will hinge on retailers. That means offering customers opportunities for seasonal spending at competitive prices.”

David McCorquodale, head of retail for KPMG, said: “Retailers may choose to be cautious with pre-Christmas sales in order to protect margins.

“However, the disappointing sales figures for October indicate that winning a share of the Christmas wallet will be just as competitive over the next six weeks as it was last year.”

Yesterday Debenhams launched a six-day “Christmas Spectacular” sale with discounts of up to 25 per cent in every department.

Marks and Spencer is running a three-for-two promotion on Christmas gifts, while fashion store Hobbs is offering up to 75 per cent off some of its range of coats and boots.